Shall women save the world’s economy?
The financial crisis has spoken, and
has shown that the number of women in corporate management has
an important effect on share prices.
Therefore, the financial crisis leads to
a cultural revolution that now favors
female leaders, according to professor
Michel Ferrary. Other European and
American researchers who have followed the financial crisis closely agree,
pointing to the importance of diversity in leadership. Several management
experts are now asking if it is women
who must save capitalism.

“Why can’t a woman be more like a man?” sings Henry
Higgins in My Fair Lady. Future generations and my
three daughters will certainly turn the question around
and ask, “Why can’t a man be more like a woman?”
Gender is a business issue and not a women’s issue. In
2008, The Economist introduced the concept of “womenomics.” It is the term for the next economic revolution:
that it will be women who save the future of the world
economy. In Iceland, women are being widely employed
in banks just to clean up. We need new management
skills and new views about what a company is and how it
should be managed. I am tempted to say: the maids are
cleaning up after the big party, while the rest of us sit
exhausted with thundering hangovers and a bad taste in
our mouths!
Women and economic viability

Never before has there been so much focus on the
economic importance of women. Our value as consumers, employees and managers is being recognized as an
expression of health, maturity and economic viability.
Women will have a central role in solving the challenges
of the labor market: an aging workforce, falling birth
rates and labor shortages.
Countries and companies have a strong desire to let
women use their potential. We have not yet reached the
most powerful positions even though we have a greater
presence in business and the world economy than ever:
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Women account for 80% of consumer spending.
Women start 70% of Canadian businesses.
More women aged 18-44 are millionaires than men.
Women produce 40% of the world’s GNP.
Women are expected to own 60% of all personal
property in the UK in 2025.

Women also constitute most of the mass of talent: 60% of
European and American university graduates are women.
Europe could realize 13% growth in GNP just by reducing the gender gap. Companies with more women in top
management will outperform those with fewer.
Moreover, researchers at Tepper School of
Business at Carnegie Mellon University have found
that female top executives perform as well as men, and
actually earn more. Their study, which followed the
career paths and compensation of more than 16,000

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Shall women save the world’s economy? - By Benja Stig Fagerland

executives over a 14-year period, found that female
executives actually earned a total of about $100,000
more per year than men of the same age, educational
background and job experience.
Women are the most powerful engine for growth

Anyone who is not living in a cave is aware that the
world is in economic crisis – the worst since the
Depression of the 1930s. The press, economists, banks
and governments keep reminding us. Major financial
institutions have stumbled and are restructuring to
become healthier, leaner and stronger. Others have
been bailed out or nationalized. Share prices are down
30%-60% around the world. Credit is tight, even after
central banks and governments have pumped hundreds
of millions (choose your currency) into the markets.
The financial crisis is prompting a cultural revolution, and there is no doubt that the economic situation
favors female managers. Michel Ferrary, professor of
management and HR at CERAM Business School, and
director of an institute that studies women’s role in business, looked at the correlation between the proportion
of women in management and share prices of 40 French
companies. He concluded that the more women in management, the fewer the losses.
The survey Women Matter: Gender diversity a corporate performance driver (2007) points in the same
direction, and concludes that more women at the top
mean more profits. The study was made by McKinsey,
a management consultancy, and the Women’s Forum
for the Economy and Society, which the Financial
Times calls one of the world’s five best forums. The
study looked at 89 companies listed on the European
exchange EuroStoxx that had market capitalizations of
greater than €933 million. Performance was compared
with the proportion of women in management between
2003-2005. As Ferrary concluded, the McKinsey/
Women’s Forum study found an apparent correlation.
Companies with more women on management and
supervisory boards produced an ROE of 11.4%, against
10.3% for the whole group. Where women were wellrepresented on boards, profits grew 11.1%, against
5.8% for the group. Market capitalization rose 64%,
against 47% for the group. The study provides strong
statistical evidence that companies with a high proportion of women in management achieve the best results.
Causality cannot be proven, but the correlation can only
speak for greater gender diversity.
Male Norwegian managers agree. In connection
with the Female Future Project, which I initiated for the
Confederation of Norwegian Enterprise (NHO), we carried out a broad study in which managers from every
listed member of NHO participated. Our study, presented

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Shall women save the world’s economy? - By Benja Stig Fagerland

at the NHO conference “Where is she buried?,” showed
that NHO-member company managers see the value of
diversity, but experience a lack of female candidates for
top posts. Of the managers surveyed, 61% were in total
or partial agreement that women in management contribute to better efficiency and quality in the company. 84%
of the companies are open to including more women in
management and boards if they can just find them.
Many factors affect share price. But Ferrary believes 42%
of share price fluctuation can be traced to the proportion of women in senior management. Even though the
studies conducted so far are careful in their conclusions,
Ferrary speculates that one reason may be men’s greater
risk-willingness.
McKinsey is also cautious about concluding there
is causality behind the performance-diversity correlation. Even so, Ferrary speculates the correlation can be
explained. “It may be, for example, that men and women
have different risk-taking behaviors, with men less, and
women more, risk-averse. If management is notoriously
over-optimistic and aims for 40% growth in sales, it will
make different decisions than a management making a
more realistic assessment of future prospects. When markets crash, investors reward companies that have pursued
a more cautious investment policy,” says Ferrary.

Foundation, urban women are at a greater risk of poverty
than in 1989. According to their figures, 25% of AfricanAmerican or Native American women in New York live in
poverty, while only 10% of Caucasian women do.
Ana Oliveira, head of New York Women’s
Foundation, believes three jobs will disappear from the
service sector for every job lost on Wall Street in coming months. On Women’s e-News she said: “The service
sector is heavily dominated by low-paid jobs for women.
When the economy contracts, low-paid workers especially
lose their jobs, and that to a great degree affects women.”
Linda Basch, leader of the National Council for
Research on Women, is quoted in Modkraft.dk (October
2008) as saying that women are particularly vulnerable to
economic downturns because they are much more likely
to be unemployed than men. Women generally make less,
with fewer bonuses, and are more likely to work part
time. In addition, they have fewer savings and smaller
pensions than men.
Political critics of the government aid package note
that ordinary people – especially women – are forgotten in favor of the financial sector. For the same reason,
policymakers should be particularly aware of the rescue
plans effect on minority women, says Oliveira.

Women foot the bill for the finance party

It is hard to escape the fact that almost all decision-makers in this crisis are men. All of those who enjoyed fat
bonuses while running their businesses into the ground
were and are men.
Fannie Mae and Freddie Mac were headed by men
when they got out of control and made loans to people
with low incomes – to people with big dreams who did
not know any better. AIG in the US, Northern Rock in
the UK, and HypoBank in Germany - all were headed
by men. The head of the US Federal Reserve, who until
recently was confident banks would regulate themselves,
even as they devised and traded ever more complex
derivatives, is a man.
Many ask if we could have avoided the current crisis if more women managed financial institutions. We
will never know for sure, but a few ideas are worth
considering.
Iceland is a fascinating case study in reckless financial behavior. Banks in this small country went on a
decade-long binge of long-term lending, making loans
worth many times the national GNP. As the banks
went crazy, the politicians (again, all men) slept. Davíð
Oddsson, leader of the Icelandic central bank (and a man,
of course) is considered to have aggravated the crisis with
his decisions and comments. He was a politician, not an
economist, and was promoted to this position, let us note,
after he retired.

Tammy Wynette sang, “Sometimes it’s hard to be a
woman” and, ironically enough, “Stand by your man.
Give him two arms to cling to and something warm to
come home to.” The two songs are just as contradictory
as the role of today’s women and the “bill” many women
will pay for the financial crisis.
At the same time that many women are giving the
crisis “two arms to cling to and something warm to
come to,” an icy-breeze is blowing. Women are hardest
hit by the financial crisis. The billions of dollars the U.S.
government has allocated to the financial rescue plan
must be obtained from somewhere. According to Joan
Entmacher, an economist at the National Women’s Law
Center, an advocacy group, the government will pay for
its $700 billion bail-out by cutting programs for people
with low incomes. Most of these are women. Experts also
point out that the costs of the Iraq War and tax cuts in
2001 and 2003 came at the expense of health programs
used mostly by poor women.
Despite this official statistic, no government economist
addresses what critics call the “feminization of poverty.” At
a recent conference about poverty among urban women,
held in New York, there was no doubt that the financial
crisis will exacerbate women’s already desperate situation.
According to a report about the economic status of women
in New York state, published by New York Women’s

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Did men create the financial crisis?

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Now, the Icelandic government has hired women to
manage the banks, change the culture and tidy up the
mess. Elin Sigfusdottir and Birna Einarsdóttir now lead
the nationalized banks, Bank of New Landis and New
Glitnir – an attempt by the government to go back and
start over. Many blame the macho-culture and irresponsible risk-taking for Iceland’s financial meltdown, and it
will no longer be tolerated. Iceland’s problems are widely believed to be the fault of aggressive young (and not
so young) men who were hungry for generous, immediate bonuses, and who agreed to load their corporate
balance sheets with incredibly excessive foreign debt.
This risky behavior, which led banks and the country
itself over the brink, is now being modified by the new
female managers who will ensure more conservative
and prudent lending.
An example of the economic caution of women is
the famous Grameen Bank, the microlender founded in
1983 in Bangladesh. Very quickly, the bank experienced
it should get as many women as possible as customers
(today, 97%) because women invested the microloans
and paid their debt on time. Men, on the other hand,
often used some of the money on themselves, and could
not repay their debt.
A Harvard study published in Evolution and Human
Behavior, in November 2008, showed that men with more
testosterone took more risk when investing than those
with less. Other studies have shown that male investors
lose money more frequently than women – worse, men
still believe they are better investors. One reason women
still do not make as much as men is that women are less
aggressive in negotiating salaries. Men take more risks
and demand more pay to do it, while women pursue their
careers more modestly, and with the organization’s welfare more in mind than a selfish hope of a big bonus at
the end of the year.
Testosterone can also make you spontaneous, sensation-seeking and danger-seeking and, in extreme cases,
euphoric or outright manic. Dr John Coates, author of
a Cambridge research study and former manager, said
that “an increase of testosterone and cortisol (a “stress
hormone”) gives the person a greater willingness to
take risks.” Too much testosterone is not a good thing,
and I agree. As Collette Dunkley, founder of XandY
Communications, a PR agency specializing in gender
communication, puts it: “The problem with finance
is there is too much thrusting individualism and not
enough femininity.”
Sorry, guys:
This is football, not synchronized swimming!

In the middle of the economic chaos, there is a development that will have consequences for how healthy future

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Shall women save the world’s economy? - By Benja Stig Fagerland

companies become. A coalition of leading businessmen
(men… that word again), board chairmen (ditto) and
managers (all men) of 17 global companies have spoken
with one voice on the urgent need for more female and
talented managers in business.
These courageous and forward-looking men, including the chairmen of BP, Anglo American and Tesco,
wrote an open letter in the Daily Telegraph about why
it is important to accelerate the glacial pace at which
women are entering UK boards of directors. These 17
men believe we must mobilize and include the best available talent, which is more important than ever in this
economic climate. “Business leaders have spoken about
the need for action on climate change and poverty, and
now it is time to do the same for gender,” they wrote.
This is the first time since the former Norwegian commerce minister, A. Gabrielsen, introduced legislation
requiring 40% of Norwegian board seats be reserved for
women. Today, Norway has more female board members
than any other country. With this courageous coalition, male business leaders have joined to make a public
request to address the gender-inequality issue. It is a welcome and much needed initiative that will certainly help
achieve gender balance in a global, safer and healthier
financial system to be built.
In Norway, in recent years, a politically correct
wind has started to rustle the leaves of business. A
wind in search of talented women. A wind that can
blow a woman unexpectedly into a board room before
she knows it. Inside sits a group of male finance types
in their 50s, a group that had hoped another “old boy”
would join them. They smile, but around the corners
of the mouth a small contemptuous and ironical smirk
is seen: “We did not choose you because you were the
best, but because we had to have a woman. We simply
‘quotaed’ you!” (I can hear them thinking that if they do
not even say it). It is now six years since Gabrielsen’s
cold wind blew in the door of Norwegian boardrooms
and divided Norway into “yes” and “no” camps on the
quota question. The panic and chill of six years ago have
been replaced by warm relief. Instead of having to make
do with quota-induced talent, the boards have been able
to rid themselves of their weakest (male) directors and
introduce top-qualified and motivated (female) talent.
Spain has passed a similar law; within seven years,
companies must give four out of 10 board seats to
women. In Germany, Angela Merkel’s government is
moving in the same direction, introducing a voluntary
charter committing to equality. In the Netherlands, the
same obligation to put women at the top is in place. And
it is not just in business that women are storming the
barriers. In otherwise traditional Spain, Prime Minister
Zapatero captured the national mood and revealed a cabi-

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net with more female than male members, including a
pregnant defense minister.
Studies show that women are more wary of risky
investments and trade than men and that women produce better long-term results. For example, Hedge Fund
Research’s Diversity Index indicates that hedge funds
managed by women (a small minority of the total) make
far better returns annually and consistently over time.
According to Lamia Walker, deputy director of the
Center for Women in Business at the London School of
Economics, it is not about women not wanting to take
risks. Instead, she believes men and women reach for
different management tools, which helps create more
effective organizations and more, different bottom-line
results. Both the McKinsey study referred to earlier in
this article and research by Alice Eagly, an American psychologist, show that women have a more varied management style and use a broader range of management tools
than men. Female managers typically point to techniques
such as group decisions and mutual inspiration, while
men typically point to decision-making on their own and
command and control. A broad range of management
techniques can help bring greater flexibility, which in
turn means that companies more easily adapt to new
situations, according to Walker.
We must focus on long-term value creation and we
need more solid financial management. Last year, Library
House found that 600 venture-backed European companies run by women all produced higher revenues with
less capital. A Creditsafe study found that companies
managed by women, and companies with both genders
on the board, paid creditors and collected from debtors
more quickly than companies managed by men. The
icing on the cake: women-led firms had better cash flow.
Anyone up for having your cake and eating it?
All this and more indicates more gender balance is
good for companies. Brooke Harrington, author of Pop
Finance, examined the returns produced by investment
clubs whose members were all women, all men, or a mix.
Harrington noted that men selected work-related shares,
while women selected consumer-related shares. As a
result, mixed clubs had more diverse portfolios – and
turned out to be the best performers. I think it makes
sense, because it is football, not synchronized swimming,
we should be practicing and playing.
Women clean up credit card payments
without coverage

How can a more feminine approach to business avoid
disaster? With the many clear consequences of this financial crisis, many have already noted that a more feminine
approach to business could be crucial in avoiding future
crises. Several countries are now bringing women in to

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”The panic and chill
of six years ago
have been replaced by warm relief.
Instead of having to
make do with quota-induced talent,
the boards have been able
to rid themselves of their weakest
(male) directors and introduce
top-qualified and motivated
(female) talent.”

clean up the mess that men have made in financial institutions. Nadereh Chamlou of the World Bank said, “the
current economic and financial crisis gives us the opportunity to insert gender into the re-writing of the rules.
We need new people at the table — people who are not
associated with the past.”
The idea that women are reasonable and cooperative, while men are competitive and aggressive, has been
around ever since Fred Flintstone threw Wilma over his
shoulder. Some believe that women are more emotionally intelligent than men. In The business case (Palgrave,
2005), Peninah Thomson and Jacey Graham quoted
a British CEO, who said “[Women] have less ego, less
positioning. We are all human children. Boys are boys.
Women bring calm and objectivity - not always, but generally, women are calmer and less aggressive in positioning themselves.”
This attitude is prevalent in the upper layers of
some businesses. Niall FitzGerald, deputy chairman of
Thomson Reuters says, “There is a feminine approach
to leadership, which of course is not limited to women.
It’s about being intuitive and rational. It’s about multitasking, sensitivity to people’s needs and feelings and

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being a generous listener.” In fact, claims FitzGerald,
an organization must be able to inspire if it is to transform itself and its leaders, and this is possible only if a
manager “attaches” himself or herself emotionally to his
or her followers, and shows self-awareness, openness,
integrity and authenticity.
What conclusions can we draw when it comes to
men and women’s different attitudes to risk-taking
and to business in general? Nicola Horlick, CEO of
Bramdean Asset Management, says, “Women have a
completely different approach to life. They are more
cooperative and bring more people in when important
decisions must be made. So it can take a little longer to
make the decision, but the decision is considered thoroughly before being made. I have absolutely no doubt
that the world would have been very different if women
had had the assignment.”
The idea that women could have had a calming effect
on the financial crisis is elucidated in a study called Are
women the antidote? published by CERAM. It shows that
CAC40 firms with more women in management have
been more resilient in this financial crisis. The report’s
author, Michel Ferrary, has found that the fewer female

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Shall women save the world’s economy? - By Benja Stig Fagerland

managers a CAC40 company has, the greater the fall in
its share price since January 2008.
Ferrary writes that “the feminization of leadership
seems to be a protection against financial crisis. At present, the financial market must take less risk and conduct
more stable business.” He compares BNP Paribas, the
shares of which have fallen 20% since January 2008,
and Credit Agricole, which has fallen 50%. 39% of BNP
Paribas’s managers are women; only 16% of Credit
Agricole’s managers are women.
“The change we need”

Women are the change agents of the 21st century.
Through the Female Future project, half of the 600 participating women have been offered board seats. In
other words, I agree with Kjell Erik Oie, Norway’s State
Secretary in the Ministry of Gender Equality, when he
says, “There is no turning back” and “we have realized
that it is good for business.”
An incorrect focus is why the current approach to
gender has failed. We must seize the economic arguments. We must take a new view, that women are equal
and different. Companies that recognize what really
motivates women in the global workplace and market
can tap a huge potential. Women’s talents will boost
business performance and rescue us from the financial
crisis. More female leaders in business and elsewhere will
require managers and politicians to have steady courage
and commitment.
Women are better credit risks and are more cautious
investors and managers. So it is tempting to say that if
more women were bank managers, we would not be in
the mess we are now.
The Center for Women in Business has researched
the link between female managers and innovation in
knowledge-based businesses. The conclusion is that innovation is not prompted by a predominance of women,
but the presence of different profiles (and thus skills and
talent, I believe) in management. A company with only
female managers is not more innovative than one with
only male managers. Difference creates the results. The
more different experiences and approaches a management team can draw on, the better and more effective
it is. Gender diversity is one of the axes, according to
Lamia Walker, but not the only one. The financial crisis
is an interesting illustration that diversity in leadership
apparently creates flexibility and more efficient decisionmaking, Walker believes.
Norwegian, French, Icelandic and Spanish companies
already see more women in management as the way forward. So when the maid is finished with the vacuuming,
could more of our companies and organizations be ready
to welcome more of her sisters with open arms? If we

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want to avoid financial crises in the future, our answer
must be a resounding “Yes!” And to quote Obama, “It’s
the change we need.”
Sources: ”Succes Punktet, Hemmeligheden bag kvinders succes”, by
Peter Horn & Benja Stig Fagerland, Schultz Forlag, Oct. 2008. Lykkelige
Norden - og hvad skal vi så med Norden i fremtiden? Balanser med
balansen, Benja Stig Fagerland, Nordisk Råds/Nordisk Ministerråds
årbog, 2007. Sunday Times Magazine, 8 June 2008. Times Online, 23
Oct 2008 ; http://women.timesonline.co.uk/tol/life_and_style/women/
article4066740.ece. The Guardian: http://www.femaleliving.com/uploads/
guardian_pdf.pdf, mars 2008. Female Future rapporten, www.femaleliving.
com, 2003, NHO. TalentTuning, www.talenttuning.dk. NHO survey; ”Hvor
ligger hun(den) begravet?” Female Future rapporten, www.femaleliving.
com, nov. 2002, NHO. Stanford, Women in business. The Economist, 12
April 2006. The Economist, 19 April 2007. The Management Today ; “Let
women tame the macho excess”, 01-Dec-08. Kvinfo., Forum/18.11.2008,
Skal kvinder redde kapitalismen? Birgitte Pedersen. Center for Women
in Business, 2008. “Er kvinder modgift?”, published in Oct 2008,
CERAM. “Why women mean business”, 2007, Avivah Wittenberg-Cox
And Alison Maitland. CERAM Business School. Center for Women at
London School of Economics. Creditsafe. Harvard survey published in
Evolution og Human Behavior (November 2008). Michel Ferrary, professor, CERAM Business School, 2008. Survey: ”Women Matter, Gender
diversity a corporate performance driver”, McKinsey, Nov 2008. Hedge
Fund Research “Diversity Index”, 2008. “Economists Fear Bailout Could
Tighten Squeeze on Women”, 26 Sep 2008, Allison Stevens Hington,
womensenews. “Lessons from the financial crash”, women-omics, Anne
Hornung-Soukup, women-omics, Dec 2008. “Crisis Likely to Deepen
Women’s Poverty in New York”, 25 Aug 2008, womensenews. New York
Women’s Foundation. Modkraft.dk, 17 Oct 2008. The WOMEN-omics
Special Report on the Credit Crunch. “Til gavn for bundlinjen”, published
in 2005 for the Norwegian Ministry of Gender Equality by Smith, Verner
et al. “Advancing Women Leaders: The Connection Between Women
Board Directors and Women Corporate Officers”, Catalyst. Djøfbladet:
”Mangfoldighed er god forretning”,Oct. 2008, by Benja Stig Fagerland.
Management-issues., 11 Aug 2008, Jan 2009.
Benja Stig Fagerland After her work on the Female Future project,
Benja Stig Fagerland achieved the status of guru in the field of women
and management in international business circles. She is an expert
in “womenomics,” the relationship between women, the market and
economics, and is often interviewed in national and international media,
including Sunday Times Magazine, The Guardian and Der Spiegel.
Fagerland has contributed to many books on management, corporate governance and networking, and she was recently co-author of
Nordisk Ministerråds Årsbog 2007 and Suksesspunktet- hemmeligheden
bag kvinders succes (2008) together with Peter Horn. She is a columnist
for Karrieremagasinet CV/Aller, womenomics.com and other publications.
Fagerland has received a long list of national and international awards
for her work, including Social Builder of the Year and Pioneer of the Year
in Norway. She is listed in Dagens Næringsliv and an economic report
as a promising future leader, and she was recently nominated for Alt for
damernes Women’s Prize. She is managing director of TalentTuning and is
an associate at the Copenhagen Institute for Futures Studies. bsf@cifs.dk